Major electric automakers, including Volkswagen, Stellantis, Audi, Mercedes-Benz, and Kia, announced remarkable initiatives to compensate for the electric vehicle subsidies the German government recently terminated.
Tesla also stepped up to bear the full EV subsidy for its buyers in Germany, as EV-a2z reported yesterday.
Germany’s EV subsidy termination
Federal Ministry for Economic Affairs and Climate Action (BMWK) ended the country’s seven-year electric vehicle subsidy program on Monday.
The German government has already spent €10 billion since the subsidy program’s launch in 2016.
The abrupt termination of the subsidy program is apparently a direct result of the 2024 budget revision. The constitutional court ruled that the €60 billion transfer proposal to climate and transformation projects-related special fund was unlawful.
“As part of the negotiations on the Climate and Transformation Fund (KTF), it was decided on December 13, 2023, to end support through the environmental bonus as soon as possible. As of December 17, 2023, no new applications for the environmental bonus can be submitted to the Federal Office of Economics and Export Control (BAFA). The background is the implementation of the Federal Constitutional Court’s ruling, as a result of which 60 billion euros will be withdrawn from the KTF. Therefore, the KTF’s economic plan for 2024 has to be redrafted, and fewer resources are available to it.”
BMWK
Automakers step up
The German government’s decision that could potentially impede the shift to electric vehicles prompted major players to step up. They delivered very encouraging news to customers by announcing their plans to cover the full subsidies of up to €6,750.
For context, automakers provide €2,250 of the €6,750 subsidy, while the government bears the remaining amount under Germany’s now-ended subsidy program.
Now, Reuters reported that the following automakers have decided to provide full subsidies for customers for a limited period:
Volkswagen
German automaker Volkswagen announced Tuesday that it would cover the full subsidy for private buyers who placed an order for eligible models in its all-electric ID lineup before December 15.
The amount will drop to €4,500 for those who ordered from January 1 to March 31, 2024.
Audi
Volkswagen’s brand Audi also announced plans to compensate customers who ordered before December 16 for the full subsidy and accept deliveries by the end of 2023.
Mercedes-Benz
Another German legacy automaker, Mercedes, would also provide a full subsidy for customers who took deliveries between December 18 and 31. It also announced plans to launch its own subsidy program as early as next year.
Stellantis
Multinational automaker Stellantis also said on Monday that it would offer the full subsidy to customers until December 31. The subsidy would drop for EVs registered by February 29.
Kia
South Korean automaker Kia will also fund the full subsidy for private buyers until March 31. It would only apply to the following models: Niro EV, EV6, EV6 GT, or an e-Soul.
Germany’s termination of the EV subsidy raised concerns among German automakers, who were already having a hard time competing with Tesla and Chinese rivals’ aggressive pricing. Industry expert Ferdinand Dudenhöffer also projected that the move would cause a 200,000-unit drop in EV sales in the coming year.
